EXHIBIT 99.1
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AIR METHODS
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The #1 Airborne Healthcare Company
AIR METHODS ANNOUNCES YEAR 2004 FINANCIAL RESULTS
AND PROVIDES FIRST QUARTER 2005 UPDATE
DENVER, CO., March 16, 2005 -- Air Methods Corporation (NASDAQ: AIRM), the
largest air medical transportation company in the world, reported revenue and
net results for the year and fourth quarter ended December 31, 2004.
For the year, revenue increased 13% to $273.1 million compared to $242.5 million
in the prior year. Net income was $11.8 million or $1.09 per basic share ($1.05
per diluted share) compared to $5.1 million or $0.53 per basic share ($0.51 per
diluted share). The current year results include a first quarter increase to net
income of $8.6 million or $0.79 per basic ($0.76 per diluted share), from the
cumulative effect of a change in accounting principle, net of tax effect.
Income before cumulative effect of change in accounting principle was $3.2
million or $0.30 per basic ($0.29 per diluted share) for the year.
For the fourth quarter, revenue increased to $68.3 million as compared with
$65.7 million during the prior year period, a 4% increase, while net income
decreased from $1.6 million or $0.16 per basic share ($0.15 per diluted share)
in the prior year quarter to a net loss of $0.2 million or $0.02 per basic and
diluted share in the current year quarter.
The cumulative effect stated above relates to the Company's decision to change
its method of accounting for major engine and airframe component overhaul costs
from the accrual method to the direct expense method effective January 1, 2004.
Under the direct expense method, maintenance costs are recognized as expense as
maintenance services are performed. Pro forma results, assuming the change in
accounting principle had been applied retroactively, would reflect net income of
$8.7 million or $0.90 per basic and $0.86 per diluted share for the year ended
December 31, 2003. Pro forma results for the quarter ended December 31, 2003
would reflect net income of $1.9 million, or $0.19 per basic and $0.18 per
diluted share.
The $1.8 million decrease in fourth quarter earnings was primarily attributed to
a significant decrease in patients transported for community bases in operation
greater than one year (same-base transports), mostly due to higher weather
cancellations. Same-base transports decreased 481 or 7% over the prior-year
quarter. Of this decrease in transports, 304 or 63% were due to specific
requests for transports that were missed due to weather conditions. The fourth
quarter results also reflect $0.8 million in third-party expenses associated
with Sarbanes-Oxley regulatory requirements and $0.2 million from losses
associated with disposition of aircraft.
During the 2004 fourth quarter, total patients transported within
community-based operations were 7,143 as compared with 7,098 during the prior
year quarter. Net revenue after bad debt per community-based transport
increased 12% from $4,418 to $4,967, while day's sales outstanding in net
receivables for consolidated operations decreased from 109 days as of September
30, 2004 to 104 days as of year-end. Consolidated maintenance expense per
transport increased by less than 1% during the quarter, as compared with the
prior-year period.
The Company also provided an update on first quarter 2005 events. While flight
volume throughout the first half of March has been very strong, weather did have
a significant impact on flight volume through February. Same-base transports
within the community-based operations through February were down 618 or 14% as
compared with the prior-year period. Of this amount, 452 or 73% were attributed
to increases in weather cancellations. In addition, retentions for workers'
compensation premiums associated with the January accidents were $0.8 million,
of which $0.6 million will be expensed during the first quarter. The impact of
reduced flight volumes and higher premium costs are expected to be partially
offset by improved net revenue after bad debt per community-based transport and
by a moderate price increase effective March 1st.
The Company announced that it has received verbal commitment to refinance its
subordinated notes totaling $23 million with lower cost, variable interest rate,
senior-secured financing with commercial banks with whom the Company has an
existing relationship. While prepayment penalties and previously capitalized
loan origination costs in the amount of approximately $3.4 million will be
expensed upon closing, annual interest savings at current interest rates are
expected to be approximately $1.9 million. The Company expects to close the
transaction during the next 30 days.
Aaron Todd, CEO of Air Methods, commented, "Although the 2004/2005 winter has
proven more severe than the prior year, we continue to be very optimistic for
2005. Our efforts to improve the timeliness and effectiveness of our collection
efforts, combined with needed price adjustments, have resulted in significantly
improved net revenue after bad debt per transport within our community-based
operations. With more moderate weather patterns and with the benefit of reduced
interest rates for a significant percentage of our debt load, we believe we are
well-positioned to produce improved earnings moving forward into 2005 and
subsequent years."
The Company will discuss these results in a conference call scheduled today at
4:15 p.m. Eastern. Interested parties can access the call by dialing (888)
396-5640 (domestic) or (706) 643-0580 (international) or by accessing the web
cast at www.airmethods.com. A replay of the call will be available at (800)
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642-1687 (domestic) or (706) 645-9291 (international), access number 4523221,
for 3 days following the call; and the web cast can be accessed at
www.airmethods.com for 30 days.
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Air Methods Corporation (www.airmethods.com) is a leader in emergency
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aeromedical transportation, medical services and technology. The Air Medical
Services Division is the largest provider of air medical transport services for
hospitals in the world. The LifeNet division is the largest community-based
provider of air medical services. The Products Division specializes in the
design and manufacture of aeromedical and aerospace technology. The Company's
fleet of owned, leased or maintained aircraft features over 180 helicopters and
fixed wing aircraft.
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AIRM
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NASDAQ
LISTED
FORWARD LOOKING STATEMENTS: This news release includes certain
forward-looking statements, which are subject to various risks and
uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors, including but not limited to the size,
structure and growth of the Company's air medical services and products markets;
the collection rates for patient transports; the continuation and/or renewal of
air medical service contracts; the acquisition of profitable Products Division
contracts and other flight service operations; the successful expansion of the
community-based operations; and other matters set forth in the Company's public
filings.
CONTACTS: Aaron D. Todd, Chief Executive Officer, (303) 792-7413 or The RCG
Group at (480) 675-0400. Please contact Christine Clarke at (303) 792-7579 to
be included on the Company's fax and/or mailing list.
-- FINANCIAL STATEMENTS ATTACHED --
AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
December 31, December 31,
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2004 2003
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ASSETS
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Current assets:
Cash and cash equivalents $ 2,603 $ 5,574
Trade receivables, net 63,178 61,208
Other current assets 25,222 17,204
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Total current assets 91,003 83,986
Net property and equipment 96,752 113,077
Other assets, net 16,968 18,586
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Total assets $ 204,723 $ 215,649
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Notes payable and other indebtedness $ 11,556 $ 8,996
Accounts payable, accrued expenses and other 30,598 31,308
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Total current liabilities 42,154 40,304
Long-term indebtedness 72,942 76,931
Other non-current liabilities 16,548 37,726
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Total liabilities 131,644 154,961
Total stockholders' equity 73,079 60,688
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Total liabilities and stockholders' equity $ 204,723 $ 215,649
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AIR METHODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Quarter Ended Year Ended
December 31, December 31,
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2004 2003 2004 2003
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Revenue:
Flight operations $ 66,301 63,311 265,697 234,710
Product operations 1,964 2,405 7,406 7,745
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Total revenue 68,265 65,716 273,103 242,455
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Expenses:
Operating expenses 55,874 52,521 221,417 194,033
General and administrative 8,323 5,882 28,641 21,550
Depreciation and amortization 2,843 2,848 10,983 11,309
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67,040 61,251 261,041 226,892
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Operating income 1,225 4,465 12,062 15,563
Interest expense (1,920) (2,100) (7,856) (8,252)
Other, net 413 291 1,158 1,055
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Income (loss) before income taxes (282) 2,656 5,364 8,366
Income tax benefit (expense) 99 (1,036) (2,121) (3,263)
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Income (loss) before cumulative effect of change in
accounting principle (183) 1,620 3,243 5,103
Cumulative effect of change in accounting principle, net - - 8,595 -
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Net income (loss) $ (183) 1,620 11,838 5,103
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Income (loss) per common share - basic:
Income (loss) before cumulative effect of change in
accounting principle $ (0.02) 0.16 0.30 0.53
Cumulative effect of change in accounting principle, net - - 0.79 -
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Net income (loss) $ (0.02) 0.16 1.09 0.53
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Income (loss) per common share - diluted:
Income (loss) before cumulative effect of change in
accounting principle $ (0.02) 0.15 0.29 0.51
Cumulative effect of change in accounting principle, net - - 0.76 -
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Net income (loss) $ (0.02) 0.15 1.05 0.51
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Weighted average common shares outstanding:
Basic 10,957,645 9,995,363 10,894,863 9,665,278
Diluted 11,320,505 10,475,884 11,314,827 10,052,989